The announcement by Finance Minister Arun Jaitley categorising tax evasion in relation to holding of illegal foreign assets as a “predicate offence” under anti-money laundering laws has, for the first time, made concealment of income a criminal offence in India.
At present, tax evasion is a civil offence in the country and offenders are prosecuted under relevant sections of the Income Tax Act, which largely talks about penalties with only some “wilful” default cases inviting prosecution and a jail term.
“With the offence of concealment of income or evasion of tax in relation to a foreign asset proposed to be made a predicate offence under the Prevention of Money Laundering Act, India will join the league of those few countries where tax evasion is a criminal offence,” a senior Finance Ministry official said about the announcement in Jaitley’s Budget speech.
